#366 Mr. Beast Leaked Memo

The podcast episode centers on a detailed discussion with John Mackey, founder of Whole Foods, who emphasized the critical importance of cost control in business success, a principle echoed by historical figures like Andrew Carnegie and Sam Walton. The host also explores insights from a leaked memo by YouTube sensation MrBeast (Jimmy), highlighting his obsessive focus on producing unique, high-quality content and the rigorous, results-driven culture he fosters within his team. The episode underscores the value of deep industry knowledge, relentless improvement, and the strategic use of consultants to achieve unparalleled success.

• John Mackey, founder of Whole Foods, emphasized the critical importance of controlling expenses.
• He noted that if he had prioritized expense control, Whole Foods might still be an independent company.
• The importance of cost control is echoed by historical entrepreneurs like Andrew Carnegie and Sam Walton.

"If founders had existed when he was younger, Whole Foods would still be an independent company."

• John Mackey attributes a significant business lesson to the insights shared in the podcast, highlighting the importance of controlling expenses.

"Profits and prices recyclical, subject to any number of transient forces of the marketplace. Costs, however, could be strictly controlled, and any savings achieved in costs were permanent."

• Andrew Carnegie’s mantra emphasizes the permanence of savings achieved through cost control, regardless of market fluctuations.

"Our money was made by controlling expenses. You can make a lot of different mistakes and still recover if you run an efficient operation, or you can be brilliant and still go out of business if you're too inefficient."

• Sam Walton’s philosophy underscores that cost control is paramount to business success, even more so than other business strategies.

• Ramp is a partner of the podcast, providing tools to help businesses control their expenses.
• Ramp offers corporate cards, automated expense reporting, and cost control features to optimize financial operations.

"Ramp gives you everything you need to control your spend. Ramp gives you easy to use corporate cards for your entire team. Automated expense reporting and cost control."

• Ramp’s services are designed to simplify and streamline expense management for businesses.

"Ramp helps you run an efficient organization. Ramp is everything you need to control, spend and optimize your financial operations."

• The platform aims to enhance organizational efficiency through comprehensive cost management tools.

• The memo titled "How to Succeed in MrBeast's Production" offers insights into Jimmy’s (MrBeast) vision and operational strategies.
• Jimmy emphasizes the importance of understanding the company’s goals and learning from past experiences.

"Hi, I'm Jimmy. And as the team is growing larger, I no longer get to spend as much time with everyone as I used to."

• Jimmy introduces the memo as a way to communicate his vision and experiences to new team members.

"We've been through a lot, and chances are, most of the problems you face, we've dealt with. So I genuinely believe that if you intently read and understand the knowledge here, you'll be much better set up for success."

• The memo serves as a comprehensive guide to help new employees navigate common challenges and align with the company’s goals.

• Jimmy highlights the value of understanding every aspect of the business deeply to make faster and more effective decisions.
• He cites examples of team members who can solve complex problems quickly due to their comprehensive knowledge of the company.

"I've seen a team of five people work on a project for a week just to give up, and James solve it in 30 minutes."

• This example illustrates the efficiency and problem-solving capability that comes from a deep understanding of the business.

"If you know your business from A to Z, there's no problem you can't solve."

• This quote from Sam Zemurri reinforces the importance of comprehensive business knowledge for effective problem-solving.

• Sam Zell learned from Jay Pritzker to use simplicity as a strategy in business.
• Identifying the most critical aspect of a deal or problem can lead to more effective solutions.

"He always said that if there were twelve steps in a deal, the whole thing depended on just one of them. The others would either work themselves out or were less important."

• Jay Pritzker’s approach to simplifying complex situations by focusing on the most critical element.

"Charlie’s got the best 30-second mind in the world. If I call him and describe a problem to him, any kind of a situation, he gets to the essence of it immediately."

• Warren Buffett’s praise for Charlie Munger’s ability to quickly identify the core issue in any situation.

• Jimmy stresses the importance of maintaining a commitment to the company’s primary goal: making the best YouTube videos possible.
• This focus helps prevent distractions and ensures that all efforts are aligned towards a common objective.

"Your goal here is to make the best YouTube videos possible. That's the number one goal of this production company."

• Clear articulation of the company’s primary goal to guide all activities and decisions.

"Everything we want will come if we strive for that."

• Emphasizes that achieving the primary goal will naturally lead to other desired outcomes.

• Clear communication of goals and expectations is crucial for aligning team efforts and achieving success.
• Historical examples show that leaders who articulate their vision clearly can inspire and guide their teams more effectively.

"Insanely great products. Do you want to build insanely great products? Come with me. If you don't, this isn't the place for you."

• Steve Jobs’ clear and concise articulation of his vision for Apple, as described in the book "Creative Selection."

"The more you know about why we do things and what we were trying to accomplish, the better off you will be."

• Jimmy’s advice to his team underscores the importance of understanding the rationale behind actions to achieve better results.

• Steve Jobs' single-minded focus on creating great products and his vision were highly motivational.
• Emphasis on the importance of dedication and commitment to one's work.

"Steve Jobs provided his single-minded focus on making great products and his vision motivated me."

• The importance of being motivated and driven by a clear vision.

• Rejection of traditional media methods; preference for the flexibility and adaptability of YouTube.
• Belief in YouTube's growing prominence and its unique content creation potential.

"I don't care how traditional media does things, this is not Hollywood and I do not want it to be Hollywood."

• Emphasis on the distinction between traditional media and new media platforms like YouTube.

"YouTube is the future and I believe with every fiber of my body it's going to keep growing."

• Strong belief in the future growth and potential of YouTube.

• Lee Lu’s criticism of traditional business education and preference for training employees without prior bad habits.
• Importance of dedication, commitment, and work ethic in achieving success.

"Lee Lu says, all of my employees never went to business school, never worked for an established management firm. Some of them never even had accounting. I found it easier to train them than somebody who did."

• Highlighting the benefits of training employees without preconceived notions or bad habits.

• Traditional media's lack of flexibility and inability to adapt to trends is a disadvantage.
• Importance of understanding the unique methods and reasons behind content production.

"99% of movies or TV shows would flop on YouTube. On top of that, they would be wildly unprofitable, have no flexibility, and long lead times that can't adapt to trends."

• Critique of traditional media’s inefficiencies and inflexibility.

"You need to be nimble and produce content our way, not the way you were taught before."

• Emphasis on the need for adaptability and understanding the unique approach to content creation.

• Focus on results rather than the number of hours worked.
• Importance of being a "grinder" but ultimately being judged on results.

"The amount of hours you work is irrelevant. Recall the story about James solving a problem in 30 minutes that a team of five couldn't in a week."

• Highlighting the importance of efficiency and effectiveness over sheer time investment.

"We are a results-based company. Get shit done and move the goalpost."

• Emphasis on a results-oriented work culture.

• Distinction between A, B, and C players, with a strong preference for A players.
• A players are obsessive, coachable, intelligent, and believe in the company's value.

"I only want A players. You're either an A player, B player, or a C player. There's only room in this company for A players."

• Clear preference for top-tier talent and the characteristics that define them.

"A players are obsessive. They learn from mistakes. They're coachable, intelligent. They don't make excuses."

• Description of the qualities that make A players valuable.

• PayPal's emphasis on hiring top talent, even at the expense of speedy staffing.
• Importance of maintaining high standards in recruitment to avoid mediocrity.

"Levchin kept the bar for talent exceedingly high, even if that came at the expense of speedy staffing."

• Highlighting the importance of high recruitment standards.

"Max kept repeating, 'A's hire A's, B's hire C's. So the first B you hire takes the whole company down.'"

• Explanation of the cascading effect of hiring less-than-excellent talent.

• Emphasis on the importance of extensive study and understanding of one's field.
• Examples from various successful individuals who exhibited an obsession with learning.

"I spent basically five years of my life locked in a room studying virality on YouTube."

• Example of dedication to mastering a specific area of expertise.

"Land slept with Wood's book under his pillow and read it nightly in the way that our forefathers read the Bible."

• Illustration of Edwin Land’s dedication to learning and mastering his field.

• Importance of creating content that stands out and cannot be replicated by others.
• Value of the "wow factor" in making content memorable and special.

"We offered someone $500,000 if they could live in a circle in a field for a hundred days. And instead of starting with his house in the circle that he would live in, we bring the house in on a crane 30 seconds into the video."

• Example of unique content creation that differentiates from others.

"Anytime we do something that no other creator can do, that separates us in their mind and makes our videos more special to them."

• Emphasis on the strategic advantage of creating unique and memorable content.

• The necessity of being deeply invested and passionate about one's work.
• Examples of successful individuals who exhibited a high level of effort and obsession in their fields.

"I want you to be obsessed with YouTube. Get rid of Netflix and Hulu and watch tons of YouTube. It will, without a doubt in my mind, make you more successful here."

• Encouragement to immerse oneself fully in the field of YouTube for greater success.

"The more invested you are in the world of YouTube, the more you understand how we can stand out and be more original, what we could be doing better, etc."

• Explanation of how deep investment in the field leads to better understanding and innovation.

• Importance of understanding and avoiding bottlenecks in the production process.
• Examples of past mistakes and strategies to prevent them.

"I used to make everyone read it. I know bottlenecks may seem obvious, but just not knowing and understanding something as simple as bottlenecks has fucked tons of videos."

• Highlighting the importance of understanding bottlenecks to ensure smooth production.

"Let's say you're in production and a video you're assigned to is put up 45 days out. A lot of things need to happen before you can start working on it."

• Example of the need for efficient planning and coordination in the production process.

• Identify and directly address the bottleneck in a project.
• Ensure both parties understand the importance and agree on deadlines.
• Maintain daily check-ins to ensure progress and adherence to deadlines.

"Tyler, you are my bottleneck. I have 45 days to make this video happen, and I cannot begin to work on it until I know what the contents of the video is. I need you to confirm you understand this is important and we need to set a date on when the creative will be done."

• Emphasizes the importance of clear communication and setting expectations to avoid project delays.

• Take full ownership of tasks and ensure they are completed.
• The job is not just to ask for something to be done but to ensure it is done.

"The job is the result. The job is not asking it to be done. The job is getting it done."

• Highlights the necessity of follow-through and accountability in achieving results.

• Encourage sharing bad news promptly.
• Avoid the “Persian Messenger Syndrome” where bad news is avoided.

"Do not just tell people on your team or me why something is good. It is infinitely more valuable to tell us why it's not good."

• Promotes a culture of transparency and proactive problem-solving.

• Always verify information and do not take anything at face value.
• Investigate thoroughly to avoid last-minute issues.

"If someone says something's too good to be true, find out why."

• Encourages critical thinking and due diligence in all tasks.

• Use the highest form of communication appropriate for the situation.
• Face-to-face communication is preferred for critical issues.

"The worst thing you could ever do when you need something for your critical component is email someone at the company; the best to talk to them in real life."

• Emphasizes the importance of clear and effective communication to avoid misunderstandings.

• Mistakes are acceptable and expected as part of the learning process.
• Focus on learning from mistakes rather than avoiding them.

"Mistakes are okay. Genuinely, they are. And I expect you to make a lot that is perfectly fine."

• Encourages a growth mindset and continuous improvement.

• Consultants can provide expertise and save significant time and effort.
• Always consider using consultants for specialized tasks.

"Consultants are literally cheat codes. Need to make the world's largest slice of cake? Start by calling the person who made the previous world's largest slice of cake."

• Highlights the strategic use of external expertise to achieve goals efficiently.

• Do not accept "no" at face value; explore all possible avenues to achieve goals.
• Demonstrates persistence and resourcefulness in overcoming obstacles.

"Do not just stop because one person told you no. Stop when all conceivable options are exhausted."

• Encourages a proactive and determined approach to problem-solving.

• Focus on unique and high-impact content that only the specific channel can produce.
• Prioritize honesty over niceness in team interactions.

"I'd rather you be honest with each other than nice to each other."

• Reinforces the importance of authenticity and constructive feedback in creative processes.

• Ownership, accountability, creativity, and effort are essential traits.
• These traits are rare but crucial for long-term success.

"It's ownership, its accountability, its creativity, and its effort."

• Summarizes the core values that drive success in collaborative projects.

• Steve Jobs emphasized the importance of honesty over niceness in team interactions.
• He believed that the quality of work should be prioritized over personal feelings and perceptions.
• Jobs' critique was often harsh but driven by a commitment to excellence.

"Steve said this brutally brilliant, insightful thing. He said, 'No, Johnny, you're just really vain. You just want people to like you. I'm surprised at you. I thought you held the work up as the most important, not how you believe you were being perceived by other people.'"

• This quote highlights Jobs' focus on the work itself rather than personal vanity or acceptance.

• The speaker emphasizes the importance of maintaining high standards and not compromising on quality.
• Examples from Steve Jobs and Anna Wintour illustrate the willingness to discard expensive projects if they don't meet quality standards.

"I have zero issues throwing away a multimillion dollar video if I don't think it's up to my standards."

• This quote underscores the speaker's dedication to maintaining high standards, even at significant financial cost.

"There's a guy that worked for Steve Jobs... they spent millions of dollars or a million dollars on an ad campaign. And after the money was spent, Steve didn't think, still didn't think it was good enough. So he didn't care. He scratched it."

• This quote illustrates Steve Jobs' uncompromising approach to quality.

• The speaker stresses the need for constant improvement in various aspects of content creation, including camera angles, pacing, story, lighting, and more.
• Attention to detail is crucial for growth and success.

"We must always be improving and innovating. The camera angles need to always get better. The pacing, the story, the jokes, the color, the lighting, the music, the props, the people, our framing, our ideas. Literally everything must always be improving and innovating."

• This quote emphasizes the speaker's commitment to continuous improvement and innovation.

• Obsession with every second of the video content is crucial for success.
• Small differences in retention time can lead to massive differences in viewership.

"People on average, watch this video a minute and 38 seconds longer than the other video of the same length. And then he types in all caps, 'Of course, it got triple the views. It's clear as day for YouTube that people like this video much more.'"

• This quote demonstrates the impact of small differences in viewer retention on overall success.

• Watching a vast amount of content is essential for gaining valuable knowledge and context.
• Experience and quantity of work lead to a deeper understanding and better performance.

"Quantity has a quality all of its own. This is something that repeats over and over again."

• This quote highlights the importance of extensive experience and continuous learning.

• Overpaying for top talent is justified as the best individuals can have a significant impact on success.
• The company values and rewards hard-working, obsessive, and intelligent individuals.

"In everything I've done, it really pays to go after the best people in the world. If Jimmy thinks you're the best video editor or the best person running the videos or the best data guy, he is going to pay you a ton."

• This quote underscores the importance of investing in top talent.

"It makes no financial sense to skimp on a salary and incentives to save $100,000 a year when hiring the second best candidate may cost you millions of dollars in lost profit."

• This quote explains the rationale behind overpaying for top talent.

• The company offers infinite room for growth and values individuals who are willing to go all in and become indispensable.
• Employees are encouraged to seek feedback and continuously improve to take on more responsibility.

"If you want to become a production manager, tell James your intention and ask him why you suck and how you can become better. Seriously. He will give you a list of things that you need to improve on to become what we need."

• This quote encourages employees to seek feedback and work on their weaknesses.

"There is infinite room for you to grow here. We will win. And we are going to build something amazing."

• This quote highlights the company's commitment to growth and building something significant.

• Dedication and passion are essential for success.
• The speaker encourages employees to be obsessive and fully committed to their work.

"I want nothing more than for you to go all in, be obsessive all day, every day, and become so goddamn valuable. This company can't operate without you."

• This quote emphasizes the importance of dedication and passion in achieving success.

"Whatever you do, you must do it with gusto. You must do it in volume. It is a case of repeat, repeat, repeat."

• This quote from Les Schwab reinforces the need for dedication and repetition in achieving excellence.